31 October 2013

We’re delighted that the Saffron Building Society has
relaunched in to the mortgage market after a few weeks rest.The new suite of products include a 95% First
Time Buyer product along with a range of other niche products such as an Expat
Buy to Let, a mortgage aimed at Professionals and Contractors, a Self Build
mortgage with 100% of build costs and a Buy to Let that allows light
refurbishment before renting out!All of
these have no redemption penalties at any time.Although not a house hold name, this is a really positive move from the
lender and well worth a review if their products are of interest.

The Help to Buy mortgage schemes have certainly bought back some
confidence to the consumer market.We’re
also seeing some positive moves from lenders across the country as they look to
help out with small deposit loans.In
addition to the Saffron previously mentioned, two other examples come from the
Hanley Building Society and Cambridge Building Society.The Hanley have reduced their 95% loan to
value product interest rate by a huge 1%.The Cambridge has now widened their
product access to mortgage brokers across the whole of England
allowing more people to access their 95% products. Both a welcome boost to market
product offerings.

Finally, House Prices are up!Over the year to July 2013, according to the
Office of National Statistics,
UK House prices
had increased by 3.3%.In London alone, there was a
9.7% increase.Halifax said that house
prices increased in August 2013 by 0.4% and Nationwide suggest in September
there was an increase of 0.9%.The
average house price in England is reported to stand at £255,000 (as at July
2013).For First Time Buyers, this is
£183,000.For sellers, Hometrack say
that the average time for a property to be on the market has fallen to 7.9
weeks, the lowest for six years!

25 October 2013

There may be a lot of green shoots and positive signs that
consumer confidence is returning in the wider marketplace, but there are still
some worrying signs that we’re still not yet out of the woods in the financial
sector.One rather alarming example is
the recent issue at the Co-Operative Bank.The Co-Op group look set to lose control of the bank over a £1.5bn
rescue plan opposition, according to some reports.Reported losses for the half year amount to
over £700m and PPI miss-selling redress looks set to top £100m. These, amongst
other factors, have led the bank in to reviewing urgent ways to raise
capital.Negotiations are still on going
with investors at the time of writing.

On a much lighter note, the Help to Buy mortgage schemes
have certainly bought back some confidence to the consumer market.We’re also seeing some positive moves from
lenders across the country as they look to help out with small deposit
loans.Two such examples come from the
Hanley Building Society and Cambridge Building Society.The Hanley have reduced their 95% loan to
value product interest rate by a huge 1%.The Cambridge has now widened their
product access to mortgage brokers across the whole of England
allowing more people to access their 95% products. Both great moves and a
welcome boost to market product offerings.

Finally, House Prices are up!Over the year to July 2013, according to the
Office of National Statistics,
UK House prices
had increased by 3.3%.In London alone, there was a
9.7% increase.Halifax said that house prices increased in
August 2013 by 0.4% and Nationwide suggest in September there was an increase
of 0.9%.The average house price in
England is reported to stand at £255,000 (as at July 2013).For First Time Buyers, this is £183,000.For sellers, Hometrack say that the average
time for a property to be on the market has fallen to 7.9 weeks, the lowest for
six years!

17 October 2013

The
Help to Buy Mortgage Guarantee scheme is picking up pace. It has now
officially launched with Natwest, RBS and Halifax launched some products last
Friday.

We’re
also informed that Santander, Barclays, Aldermore Bank, Virgin Money, One
Savings Bank and Nationwide also intend to offer products for the scheme in the
coming months.

Key
points regarding the scheme:

Applies to
mortgages up to 95% LTV.

Lender purchases
a 15% guarantee from the government

£600k property
price maximum.

Available for
First Time Buyers and home movers for purchase of main residence only and
remortgages. NOT available for Buy to Let or second homes.

Clients must
meet the lenders standard affordability guidelines and criteria.

Clients with a
history of credit issues will NOT be eligible for the scheme.

Rates
on offer from the state owned lenders start from 4.99% and require just a 5%
deposit. But do your homework on these, terms and conditions apply.

I
mentioned this briefly in a previous column, but for those who can achieve a
10% deposit, there are other options. Rates are fixed at sub 3% and 20%
of the loan will be on an equity loan basis, repayable on sale of property with
no repayments or interest payments required prior to this. So
effectively, customers are paying monthly interest amounts on a 70% loan, yet
have the benefits of just a 10% deposit.

Lenders
are certainly looking for niche areas to lend in and are showing a great
appetite to lend.

With
this in mind, lenders will look closely at an individual’s recent payment
profile, how many recent credit searches have been incurred by financial
institutions and more. The more credit searches you have on your profile,
over a recent amount of time, the more likely your credit score will be lower
as a result. Try and ensure there’s no missed or late payments as these will
also decrease your credit score. In short, your credit search / score are
the basis on which most lenders will initially decide whether to lend to you or
not. If you’ve not checked your credit file before, it is well worth a
review. Experian, Equifax and Noddle tend to be the main providers
used in our market with some offering free initial trials and you can find
links to these on the AToM website.

10 October 2013

We
are noticing much greater numbers of clients looking to raise funds in the
commercial sector and this is a very positive sign that confidence is returning
and not just in the residential purchase or re-mortgage arenas.

Commercial
lending was long the domain of high street banks and particularly so when all
that was needed was a site meeting coupled perhaps with a good lunch with the
bank manager and often the funds were quickly available! Life has changed and the high street lenders
are now more dramatically conservative in their lending with the decisions
often being made at credit and risk committee level. This has opened up
the market in many differing ways with a myriad of new lenders coming to market
during the last few years covering almost every possibility from lock up
shops to multi-million pound office blocks and hotel complexes.

There
are lenders who will offer - short term lending for the swift purchase of an
auction property; funds to support multi development or self-build including
commercial units; funds to assist the re-mortgage of large property
portfolios; funds to help buy existing businesses or extend current business
portfolios or Houses of Multiple Occupation; funds to convert or extend
offices or factories. The list goes on!In fact it is almost endless. If there is a
defined, affordable commercial need, then there is likely to be a lender out
there somewhere looking to write the business!

Of
course, rates and terms will vary depending upon the type of commercial
mortgage written. Lenders have varying degrees of risk assessment
calculations and this will determine the loan to value and charging
rate levels.

So,
where have all these lenders appeared from? It is no surprise to learn that they have been
there for a number of years simply awaiting the return of commercial mortgage
demand. Some are subsidiaries of high street banks who have criteria which
suits certain market segments. Others
may be as a result of private funders who are looking to secure a decent return
for their investment as against the poor market figures at the moment.

As
always, please ensure that you get professional independent advice before
entering into any agreement.

03 October 2013

The
Prime Minister has bought forward the launch of the Help to Buy (mortgage
guarantee) scheme to October, instead of January 2014.But let’s review the small print before we
all start celebrating the launch of the (some say) controversial scheme and how
it may create a housing bubble.

The
Help to Buy MG scheme will help people buy a home up to £600,000 with just a 5
per cent deposit.The government will
then provide the lender with a guarantee for the next 15 per cent of the
property’s value, charged as an interest free equity loan to the consumer, for
a fee (after year five).A lender will offer
the remaining amount as a first charge, subject to normal mortgage terms and
underwriting and the scheme will be open for three years.This is to purchase any property and is not
restricted to new build properties as per the existing Help to Buy scheme.So 5% deposit, 15% equity loan (interest
free) and 80% mortgage.

Secondly,
at the time of writing, many questions were still yet unanswered and only three
lenders had committed to the scheme – Natwest, Royal Bank of Scotland and
Halifax.All government backed lenders..

Finally,
we are led to believe that despite the doors being open for business, the
actual 15% government guarantee to the lender, will still not be available
prior to January 2014 and this may be a slight restriction to other lenders who
might have wanted to offer these mortgages initially.

Unfortunately,
at this time, Help to Buy MG will not be available to those who have had any
historic credit issues.

A
similar proposition for those with a 10 per cent deposit is already on offer in
the specialist sector.A first charge
lender takes a 70 per cent loan and a second lender adds a further 20 per cent
as an equity share.However, the latter has
no monthly required payment, no fee after the fifth year and is only repaid
once the property is sold, or client redeems early.

All
of these schemes can be confusing, so always seek professional and independent
advice to ensure you are getting the right deal to match your requirements.